Jakarta:According to BERNAMA News Agency, the Federal Government has projected the Budget 2027 to reach RM459.8 billion, signifying a 3.6 percent increase from the revised allocation for 2026. This budget is equivalent to 19.8 percent of the country's gross domestic product (GDP).
The Ministry of Finance (MoF) revised the 2026 Budget to RM441.1 billion, up from the previous RM419.2 billion, reflecting changes in spending priorities and fiscal requirements. In its Fiscal Outlook and Federal Government Revenue Estimates 2027 report, the ministry detailed that RM376.8 billion of the 2027 Budget is allocated for operating expenses (OE), and RM83 billion is designated for development expenditure (DE).
A significant portion of the total allocation, 30.2 percent, will be directed to the Ministry of Education, Ministry of Health, and Ministry of Defence, focusing on rakyat-centric projects and programs.
The social sector is set to receive RM161.6 billion, representing 35.1 percent of total expenditure, highlighting the government's focus on human capital development and public welfare. The economic sector is allocated RM59.4 billion, the security sector RM46 billion, and general administration RM23.4 billion. The remaining RM169.4 billion includes charged expenditures and transfer payments.
The OE accounts for 16.2 percent of GDP, a 3.8 percent rise from the revised 2026 budget, attributed to increased allocations for emoluments, retirement charges, and debt service charges (DSC), among others. Emoluments form the largest component of OE, standing at 29.6 percent or RM111.6 billion, with a projected growth of 2.9 percent.
DSC is anticipated to rise by 6.5 percent to RM61 billion, with domestic debt servicing making up 98.4 percent of the total. Subsidies and social assistance are expected to slightly decline by 2.3 percent to RM72.7 billion, making up 19.3 percent of total OE.
The DE, projected at RM83 billion for 2027, covers approximately 1,500 newly approved programs and projects. The economic sector receives the largest share at 45.4 percent, followed by social, security, and general administration sectors. The government commits to allocating at least three percent of GDP to DE, in line with the Public Finance and Fiscal Responsibility Act 2023.
RM37.7 billion is specifically allocated to the economic sector to boost national competitiveness, with the transport subsector receiving RM17.6 billion to enhance connectivity and reduce traffic congestion. The environment subsector gets RM3.6 billion, and the trade and industry subsector is allocated RM3.5 billion to support various development activities.
The government also plans to provide RM1 billion in loans through DE for infrastructure development, with state governments being the largest recipients. Loan repayments are projected at RM1.5 billion, primarily from companies and state governments.